Brookhaven Publishing Accounting Problem

1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing: 

• Social Security taxes: 6% on the first $55,000 earned 
• Medicare taxes: 1.5% on the first $130,000 earned 
• Federal income taxes withheld from wages: $7,500 
• State income taxes: 5% of gross earnings 
• Insurance withholdings: 1% of gross earnings 
• State unemployment taxes: 5.4% on the first $7,000 earned 
• Federal unemployment taxes: 0.8% on the first $7,000 earned 

The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end. 
a. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will include deductions for the following:
• Social Security taxes
• Medicare taxes
• Federal income taxes withheld
• State income taxes
• Insurance withholdings
b. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following:
• Matching Social Security taxes
• Matching Medicare taxes
• State unemployment taxes
• Federal unemployment taxes